UPDATE: In front of a packed hearing room, the City of Philadelphia’s City Council voted unanimously to begin public hearings on creation of a local pubic bank.

Public banking proposals are popping up all over the country. The Cities of Santa Fe and Philadelphia have had recent breakthroughs. In Tucson, Mayor Johnathan Rothschild’s recent newsletter included a brief note about the Community Banking Project. City funds have been used to make $37 million in local small business loans.

This week the City of Philadelphia’s City Council will hear a resolution on public banking. Here it is.

RESOLUTION

Authorizing the Committee on Commerce and Economic Development to hold hearings regarding public banking.

 WHEREAS,The creation of a public bank offers the possibility of achieving multiple policy objectives, including stimulating economic development, spurring job creation, reducing municipal debt service, and expanding the tax base, through direct, long-term local lending at below-market rates; and

WHEREAS, Philadelphia has a history with public banks, the Pennsylvania Bank – the first one in the United States – having been founded here in 1780 by Founding Father Robert Morris; and

WHEREAS,The Bank of North Dakota serves as a model for public banks that operate to do more than infrastructure financing; since 1919, it has reinvested state tax revenue and other deposits to make loans to small- and medium-sized businesses within North Dakota, limiting management costs, allowing the citizenry to successfully influence development, and earning the state hundreds of millions of dollars in returns; and

 WHEREAS,A public bank could partner with community banks to extend reliable, affordable credit to small businesses and other community stakeholders, neither acting as a retail establishment in competition with private banks, nor requiring brick-and-mortar locations, tellers, or extensive marketing; and

WHEREAS,Profits from a public bank could be split between public and private interests and reinvestment in the bank’s local investment portfolio, while the capitalization of local commercial corridors and small businesses would foster city wide benefits to citizens, neighborhoods, and the School District; and

WHEREAS,A public bank could facilitate additional goals, such as citizen inclusion in setting investment priorities and hiring preference for local vendors; and

WHEREAS,The potential of a public bank in Philadelphia would be a significant change for the City, and therefore woul drequire the input of citizens, financial institutions, the Administration, and other stakeholders. Now, therefore, be it

RESOLVED, BY THE COUNCIL OF THE CITY OF PHILADELPHIA, That council does hereby authorize the Committee on Commerce and Economic Development hold hearings regarding public banking.

 Introduced by:

Councilman DerekS. Green             Councilman Curtis Jones    

 January 21, 2016